Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Analysis of Financial Statements

Question:

Which analysis deals with different items of the same period?

Options:

Dynamic

Internal

Horizontal

Vertical

Correct Answer:

Vertical

Explanation:

The correct answer is option 4- vertical.

Common size statements are useful, both, in intra-firm comparisons over different years and also in making inter-firm comparisons for the same year or for several years. This analysis is also known as ‘Vertical analysis’.